| dc.description.abstract | Globally, more than 2.5 billion adults do not have access formal bank account, most
of them in developing economies. The recent and widespread availability of
affordable mobile phone technology in developing countries has paved the way for
the development of a number of mobile money and electronic remittance services.
Similarly, financial services industry has undergone phenomenal transformation and
in just half a century, banking and customer’s access has changed from traditional
retail banking to mobile phone banking. These developments triggered this study to
determine the effects of mobile money on financial deepening in Kenya. The
descriptive study used macroeconomics variables such as lending rates, deposits
money bank and credit to private sector as control variables to develop a regression
model using secondary data obtained from Central Bank of Kenya between 2007 and
2013. The results established that mobile money is the major determinant of financial
deepening levels in Kenya. An increment in mobile money factor by single factor
leads to increment of financial deepening factor by 3 times, at 95% level of
confidence. Deposits and lending rates also have a positive influence on financial
deepening while credit to private sector affects deepening levels negatively though
insignificantly. This result calls for policy makers in Kenya to critically address the
mobile money concept in order to develop financial sector. Risks factors affecting
development of mobile money should be addressed urgently and regulation put in
place to encourage use and access of these services. Finally mobile service providers
should open up money transfer services to all players and competition should be
encouraged to ensure efficiency and effective service delivery. | en_US |
